Why Are Coinbase (COIN) Stocks Soaring Today?

Shares of cryptocurrency exchange Coinbase (NASDAQ:COIN) rose 18.9% in the afternoon after stocks related to the cryptocurrency sector rose sharply after Bitcoin surpassed $80,000 and hit a new all-time high.

The improved sentiment reflects growing optimism that the Trump administration will adopt more supportive policies towards the crypto industry. This narrative gained even more credibility after Republicans regained control of the Senate in the 2024 elections, implying more predictable and stable policies. With supportive measures, there could be increased acceptance and integration of cryptocurrencies into mainstream financial systems.

Additionally, rising asset prices typically boost investor confidence and prompt traders and investors to increase their participation by making new bets or trading more frequently.

This increased trading activity leads to higher transaction volumes and more revenue for trading platforms like Coinbase and Robinhood, which charge fees for these trades.

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Coinbase shares are extremely volatile, with 78 moves of more than 5% in the last year. But such big moves are rare even for Coinbase and suggest that this news has had a significant impact on the market’s perception of the deal.

The last big move we wrote about came five days ago, when the stock rose 28.6% following news that stocks rose as Republican Party candidate Donald Trump became the winner of the U.S -Presidential election 2024 has been declared.

The market is trying to gauge the impact of some of the expected changes under the new administration, mainly related to trading decisions affecting semiconductor and defense stocks, regulatory actions in the crypto and energy industries, and the broader impact of new measures on key economic aspects the Fed tracked indicators, particularly inflation.

After the election was called, Bitcoin hit a new all-time high, crossing the critical $75,000 mark. Market reaction suggests investors are expecting favorable action. This justifiable reaction follows recent comments from Donald Trump, who promised to make the United States the world’s “Bitcoin superpower.”

Coinbase is up 109% year-to-date to hit a new 52-week high of $327.48 per share. Investors who purchased $1,000 worth of Coinbase shares in the April 2021 IPO would now be looking at an investment worth $998.39.

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